A drill rig which operates by advancing a drill string composed of a plurality of connected drill rods requires a system for handling the individual drill rods. This system is needed to transfer individual drill rods between the drill string and a storage facility such as a rod tray or bin. When the drill rig is in operation drilling a hole, additional drill pipes must be connected into the string in order to advance the hole. This requires the transfer of drill rods from the storage facility to the drill string. Conversely, when the drill string is being tripped, individual rods are broken out of the string and moved to the storage facility. A rod handling system includes a lifting device such as a hoist or mechanical arm, together with a rod handling assembly that can selectively engage and disengage a drill rod. Thus, when a drill rod is engaged by the rod handling assembly, the associated hoist or arm is operated to transfer the rod between the drill string and the storage facility.